by Ray Strickland III
Does your employee benefits program align with your company goals?
How your company manages these factors has a direct relationship to your company’s Return on Investment.
Premiums – Depending on the size of your company, the overall premium can be negotiated down using market competition and actuarial firepower. I advise consulting with an agent who has a good relationship with multiple carriers. If you are a larger group, hiring a qualified actuary who can evaluate paid claims versus incurred claims and then monitor those claims quarterly gives you the best opportunity to save money, even if you are fully insured.
Plan Design – Determining the best plan for your company can have a big impact on your renewal rate increase. The obvious choice for cost savings is to manipulate deductibles, copays and coinsurance, but this may be the time to revisit the options of HMOs and PPOs. New health reform laws are creating a revitalized HMO market that could offer better care at a lower price.
Employee Out of Pocket Expenses – For your employees, how much they spend on premiums compared to how much they spend out of pocket is the ultimate test of how they value your benefits plan. Several new plans, including Group Critical Illness and Group Accident plans, provide lump-sum payments to help employees with costs associated with being out of work. Many of these programs offer a wellness benefit that almost pays for the premium itself.
Wellness Programs – Properly implemented programs can actually lower your overall premium and employees’ out of pocket expenses while increasing loyalty, attendance and performance on the job. Many programs are completely free. Check out www.hhs.gov/safety and www.healthfinder.gov/HealthTools and you will be amazed at what’s available with a minimal investment on your part.
Employer Contribution – There are several ways to structure your contribution strategy to improve ROI. Your provider may have tools that will demonstrate the impact of adjusting your contribution strategy, allowing you to explore which options will have the most positive impact on employee deductions, taxes, annual savings and profits.
Tax Incentives – If you are not using all of your tax incentives, you are missing an opportunity. Examples include the small business tax credit, individual tax deduction on health claims above 7.5 percent of salary, Section 125 planning, FSAs, HSAs, and Reimbursement Arrangements. A new 50 percent tax credit for joining exchanges will be in effect for two years starting in 2014. And don’t forget the current tax deduction for offering health benefits to employees.
Employee Satisfaction – When an employee voluntarily leaves, it costs the company up to 33 percent of his annual salary to secure a replacement. Recent surveys indicate that 1 out of 2 employees are looking for a new job. If your business employs over 50 workers, the cost of employee turnover will be even higher under the new health reform legislation. It’s more important than ever to ensure that your benefits offerings are doing their part to retain valuable employees.
Ray Strickland is the Regional Director at Benefit Advisors. Benefit Advisors’ purpose is to create a better place to work by helping companies achieve higher profits through re-aligning their employee benefits program to reach their business goals.